Give And Take

Good credit goes a long way. Ask Delores Canté, a private banking associate for Wells Fargo Bank. After a period of unemployment several years ago, she leveraged her clean credit slate to renegotiate the terms of a loan.

“I’d had my car financed with my credit union for two years or so, with no problems,” says 36-year-old Canté. By simply calling a loan officer, Canté negotiated a deal to defer her monthly $426 Jeep Grand Cherokee car note for two months. Once she landed a job, Canté not only resumed making regular payments but also paid her car note three months in advance.

We all have unexpected crises that may affect our ability to repay a debt. Here’s how to renegotiate the terms of an agreement with your lender and still maintain leverage:

Communicate with your lender. According to Doug Perry, first vice president with Countrywide Home Loans Inc., a national leader in residential financing based in Calabasas, California, the first step in obtaining assistance from your lender, should any unexpected situation arise, is to communicate the problem. “Contact the lender as quickly as possible,” says Perry. “Don’t wait for delinquency to occur. Lenders are eager to assist customers at no cost and with no obligation.”

Just make sure to have documentation to support the claim.

Pay your bills — on time! It’s important to not only pay your bills but also pay them on time. Create a system, where as soon as the bill comes in, you write the check and send! Or keep a conspicuous record of the due date and amount as a reminder. That way, when the lender reviews your payment history, it will reflect an on-time, consistent, payment history.

Earlier this year, Silas Frazier Jr., a 48-year-old real estate broker in Clarkston, Georgia, renegotiated the interest rate on a furniture loan. “This was a revolving-charge loan, with about a 19.99% interest rate,” says Frazier. “I called the company to ask if they could offer a lower interest rate.” Initially, the answer was no, however, Frazier informed the lender that he would close the account and seek another creditor. After firm back-and-forth discussions, a supervisor agreed to lower the interest rate to 14%.

According to Mark Jackson, residential lending manager with Advance Bank in Baltimore, lenders are more likely to work with customers with whom they have had a mutually beneficial relationship. “What works in the customer’s favor is good payment history,” says Jackson. “Those who hit and miss with their payments and stay behind in payments are often viewed as less believable. A customer’s credit is all we know about their character.”

Talk to someone who can get results. In addition to a positive payment history, Frazier says knowing whom to talk to for results was key in renegotiating the terms of his loan. Don’t be afraid of the word “no,” he says. “You have to remember that the first person you talk to on the phone [most likely] cannot make decisions.”

The decision maker may be the president, vice president, executive director, office